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A small business owner’s profession is more than just a job – entrepreneurship is a lifestyle. Many small business owners support their families completely on their business incomes and for some couples, a small business is a joint venture. When a couple who relies on a small business divorces, the business or their share in it must be divided according to Indiana’s property division laws. In Indiana, a divorcing couple’s property must be divided equitably, which means that rather than splitting the marital estate 50/50, the couple’s assets are divided according to each partner’s needs and contributions.
During your initial discussions with a divorce lawyer, go over your options as a small business owner. What you choose to do with your business after your divorce can determine the most appropriate valuation method to be used to appraise it. Like other assets, such as your home, your business or share in a small business must be appraised to determine a fair value to use when dividing it in the divorce.
You might want to sell your business and move forward with a new career after your divorce, which might or might not be another entrepreneurial venture. This could be an attractive option if you and your spouse owned the business together and neither wants to continue to operate it after the divorce. Often, couples in this position sell their businesses and split the profits.
If you or your spouse want to continue to operate the business as a sole owner, that spouse may choose to buy out the other’s share of the business, which might or might not be 50 percent, depending on each partner’s contribution to its operation.
If you and your spouse both want to continue running the business and feel you can continue to work together after the divorce, consider operating it jointly as business partners. This will require a new agreement defining each party’s role and assets within the business.
There are three ways to value a small business:
For more information about the divorce process and what you can expect from it given your specific circumstances, contact The Bellinger Law Office to set up your initial consultation with experienced divorce lawyer Robert Bellinger. Business owners have unique needs that individuals with other occupations do not have to consider. During your consultation with us, we can discuss these needs and how to address them during your divorce.
- on October 13, 2020
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